First, I would say that it is not only Chinese people who have trouble keeping their families’ wealth intact over more than three generations. People in other countries have also remarked on this phenomenon. My view is that this problem is caused not by Chinese education but rather by human nature.
Human nature seems to encourage people to be complacent when they have easy lives. It seems that people generally do not want to work any harder than they have to. This is not true in all cases, but it seems to be true on average. People who grow up rich, then, are less likely, it would seem, to be motivated to work very hard. This means that the second and third generations of a rich family are less likely to work as hard as those from the first generation who were struggling to create wealth.
A second factor is that the people of the second and third generations will expect to have better lifestyles than the first generation did. They will grow up used to being comfortable and they will want to have more and more things. This will mean that it costs them more to live than it cost the first generation.
Finally, the wealth in the family will tend to get spread out over more people as the generations pass. The first generation, for example, will have to have enough money for three or four people (the parents and one or two children). If there are two children, the money will have to be spread out over four adults (assuming the children marry) and their children. This trend continues in the third generation.
All of these things make it hard for wealth to pass three generations. The wealth gets split up among a larger number of people, all of whom want more lavish lifestyles. At the same time, human nature causes the second and third generation to be less driven (on average) and therefore less able to keep creating wealth.